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Unlocking the potential for energy efficiency across china's subnational value chains

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  • Zhang, Meichen
  • Wang, Yuan

Abstract

Amid rising uncertainty in global climate governance and increasingly difficult inter-state coordination, leveraging domestic specialization to convert efficiency gains into emissions reductions offers a feasible pathway. In this study, we develop a time-series global multi-regional input-output (MRIO) database embedding Chinese provinces, enabling subnational value chain decomposition and logarithmic mean divisia index (LMDI)-based analysis of energy intensity dynamics. This framework captures the spatiotemporal evolution of China’s energy intensity, identifies key inflection points across policy phases, and disentangles underlying drivers. Empirical results indicate that between 2003 and 2017, China experienced a decline in energy intensity across both production and consumption sides, with reductions of 69% and 60%, respectively. These improvements peaked during the 11th Five-Year Plan, as fossil-fuel-reliant, resource-intensive provinces cut energy intensity well above the national average. Interprovincial industrial linkages are a key channel driving energy-efficiency gains. Optimizing domestic value-chain coordination provides a feasible, efficiency-based mitigation margin under existing national burden-sharing.

Suggested Citation

  • Zhang, Meichen & Wang, Yuan, 2026. "Unlocking the potential for energy efficiency across china's subnational value chains," Structural Change and Economic Dynamics, Elsevier, vol. 77(C), pages 168-184.
  • Handle: RePEc:eee:streco:v:77:y:2026:i:c:p:168-184
    DOI: 10.1016/j.strueco.2026.01.001
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